Consider a zero-coupon bond with a $1,000 face value and 15 years left until maturity. If the bond is currently trading for $46
2 answers:
Answer:
5.19 ( D )
Explanation:
A zero-coupon bond is a bond traded/issued to the investor at a discounted price i.e a price lower than the actual face value of the bond. this type of bond dose not attract periodic interest payments rather at the time of maturity the initial face value of the bond is paid to the investor.
The value of a Zero-coupon bond can be calculated as
value of zero - coupon bond =
F = face value
r = yield
t = time
But the yield to maturity can also be calculated using this formula
r =
F = face value of the bond ( $1000 )
Cp = current price ( $468 )
T = time to maturity ( 15 )
therefore yield =
= 2.13675
= 0.05186 = 5.186
i.e the yield to maturity is closest to 5.19 ( D )
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The question is incomplete. The complete question is :
Bradley's Copiers sells and repairs photocopy machines. The manager needs weekly forecasts of service calls so that he can schedule service personnel. Use the actual demand in the first period for the forecast for the first week so error measurement begins in the second week. The manager uses exponential smoothing with α = 0.1 . Forecast the number of calls for week 6, which is next week. Week Actual Service Calls 1 2 3 4 5 The forecast for week 6 is ___ service calls. (Enter your response rounded to two decimal places.)
Solution :
It is given that :
The manager of Bradley's Copiers needs weekly forecast of the service calls so that the manager can schedule service personnel.
Using the for the 1st
for the 1st week so as the error measurement begins in the second week.
The exponential soothing, α = 0.1
Week Actual service calls Forecast
1 28 28
2 34 (28 + 0.1 x (28-28)) = 28
3. 38 (28 + 0.1 x (34-28)) = 28.60
4. 27 (28.60 + 0.1 x (38-28.60)) = 29.54
5. 25 (29.54 + 0.1 x (27-29.54)) = 29.29
6 (29.29 + 0.1 x (25-29.29)) = 28.86
Therefore, the forecast for the week 6 = 28.86
